THE IMPACT OF FINTECH COMPANIES ON FINANCIAL INCLUSION IN NIGERIA.

Abstract

Financial inclusion has become a major policy objective in developing economies due to its potential to reduce poverty, promote economic growth, and improve social welfare. In Nigeria, a significant proportion of the population has historically remained outside the formal financial system due to factors such as inadequate banking infrastructure, poverty, low literacy levels, and geographical barriers. The emergence of financial technology (fintech) companies has transformed the financial services ecosystem by introducing innovative digital solutions that improve access to financial products and services. This study examines the impact of fintech companies on financial inclusion in Nigeria. Drawing on the Financial Intermediation Theory, Innovation Diffusion Theory, and Technology Acceptance Model, the study explores how fintech innovations such as mobile payments, agency banking, digital lending, savings platforms, and electronic wallets have expanded access to financial services among underserved populations. Recent evidence indicates that formal financial inclusion in Nigeria increased from 56% in 2020 to 64% in 2023, while financial exclusion declined from 32% to 26%, demonstrating significant progress in expanding financial access. The study concludes that fintech companies have become critical enablers of financial inclusion and recommends policies aimed at strengthening digital infrastructure, improving financial literacy, enhancing cybersecurity, and supporting innovation-friendly regulations. EFInA +1 Keywords: Fintech, Financial Inclusion, Digital Finance, Mobile Banking, Agency Banking, Nigeria.